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Former Member

Z pricing procedure determination...

Hi experts,

I have to implement a new pricing procedures for a company where actually the same sales area has more than one business lines and the material division is the one taken into account in order to determine the business line.

Now it is needed to have different pricing procedures for each business line.  

At this point, creating new sales area in order to split business lines for this purpose is going to be so complicated due to the amount of existing interfaces with 3P systems currently related to the business processes; Instead of doing that they need to determine the pricing procedures based on the sales office, which is not a standard configuration.

1) What is the best way to do this? (something similar to OVKK + sales office)

2) The worst case is to create new division (new sales area) but if this is the case in order to avoid the development, what should I take into account due to the current process to ensure that creating new sales division is not going to affect dramatically?

Thank you for your help,

Regards.

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4 Answers

  • Best Answer
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    Former Member
    Oct 17, 2013 at 09:48 PM

    Thank you TW and JP.

    Current pricing procedure is shared between 3 or more business lines and it contains a very basic structure:

    1) List Price condition

        Subtotal 1

    2) Manual condition for Discount (Adjustment + or -)

        Subtotal 2

    3) All additional services and freight are considered as individual materials with their price.

        Rounding

        Subtotal 3

    4) Plus cash discount

        Subtotal 4

    5) Taxes as usual

        Subtotal 5

    This pricing procedure is applicable to all business lines and they just differentiate them by Customer Sales Group for reporting purposes.

    Now they need the business lines pricing structures to be independent and they need to have at least 2 different pricing procedures because each business line pricing conditions are going to be different regarding the following concepts:

    - Freights

    - Discounts

    - Surcharges

    - Rebates

    Additionaly they need to apply some pricing routines specific for a business line that are not applying to another.

    Let's say they are now going to convert the current pricing procedure into the following two different structures (And keep the original one as well):

    Business line (1)
    Material Division (X)
    Sales Group (111)
    Pricing Proc (AAA)
         List Price
          KPI A
          KPI B
         Subtotal 1
          KPI C
          KPI D
         Subtotal 2
          KPI E
         Subtotal 3
          KPI H
         Subtotal 4

    Business line (2)
    Material Division (Y)
    Sales Group (222)
    Pricing Proc (BBB)
         List Price
          KPI A
          KPI I
         Subtotal 1
          KPI J
          KPI K
          KPI L
         Subtotal 2
          KPI E
          KPI M
          KPI N
          KPI O
         Subtotal 3
          KPI H
         Subtotal 4

    That's going to be probably better to restructure organization in order to have every sales area separated with its own pricing procedure, which implies a BIG operational impact (This is the standard way and from my point of view the most recommended) but I have to consider a "Z" development in order to keep the current sales area structure since the business has to have both points of view or any other options you can forsee at this point. (One additional option would sound so crazy but probably can works and it implies to get all KPIs needed for all the business lines individually and get them together in only one pricing schema with a lot of exclusions and routines that I don't recomend... Have you ever done this before?).

    I would like to have your expert point of view in order to get the best recommendation and impacts for each of both scenarios.

    Hope this explanations helps to clarify my original question.

    Thank you.

    Best.

    Alex.

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    • Alex,

      Yes, you can create different sales document types and use the existing delivery types and billing types.

      Furthermore, you can also use the existing item categories.

      Your requirement is to have different pricing procedures for different business lines, but the process (i.e. delivery, billing) is the same across different business lines. Thus you pricing procedure determination you can create new sales document types.

      For the creation of new sales document types, some comments -

      1. You can have (in addition to different Document pricing procedures) different descriptions, different number ranges for easy identification of different processes.

      2. Assignment of sales area to different sales document types

      3. Copy control between new sales document types with delivery types (existing).

      Copy control Delivery type to Billing type is not needed, if you use the existing item categories.

      4. In the new sales document types - input the delivery type and the billing types; also check for the basic functions - incompletion procedure, etc. etc.

      (assignment of output procedure to the new document types, if necessary)

      5. Lastly configuring pricing procedures and pricing procedure determinations.

      Keep in mind, if you have different CRs then the sequence could be important (e.g. CR with the DoPP should go first and then the determination of pricing procedure) 

  • Oct 17, 2013 at 02:53 AM

    Alejandro,

    Creation of new division (and new sales area) would involve many configuration steps (e.g. assign division to sales org; create new sales area; assign new sales area to the sales document types etc.) and many master data maintenance (extension of customer; would you have to change the division in the material master record? etc.)

    Furthermore, there are existing interfaces with 3P system.

    Can you create new sales document types, for each business line?

    Document pricing procedure is also a determining factor in the pricing procedure determination.

    You want to determine pricing procedure based on sales office.

    Could you please explain why? Different offices handle different business lines?

    Sales office is at header level in the sales order. This is ok.

    But it is at item level in the billing document. So in the billing documnent

    - is pricing going to be re-dertermined?

    - can a billing document have more than one sales offices?

    This Z pricing procedure determination is for the entire business or for only some part.

    In other words would z determination work for some cases (orders) and the standard determination work for other orders?

    It is possible to go for z procedure determination, it would involve coding in a userexit, at sales order level.

    What is the document flow? Do you have any presales documents too? (e.g. quotations)

    Then here to the z pricing procedure determination has to get triggered.

    Also to look into would to make the field Sales office mandatory in the sales order, if you choose to go with this z procedure determination.

    This can be done with incompletion procedure (assigned to the sales document type).

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  • Oct 17, 2013 at 09:10 AM

    Alejandro

    Apart for what analysed & suggest presented by TW.

    Frankly, it doesn't matter how many TPA interface you have to determine pricing.

    Can you share your pricing procedure from 2 different business line? This will assist us in understanding whether you really need separate pricing procedure. Please refer my post in following link to understand under one sales org better we have one pricing procedure: How many pricing procedures to be created?

    Sales Organisation 2  or 3 additional pricing is acceptable, if your client operates from one or 2 or 3 country. But, visualize a situation, where your client operated in more than 5 counties. This will be really complex & complicated handle. Refer standard pricing procedure RVAA01, check skillfully it is configured.

    Let us know your concern.

    Thanks, JP

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    • Alejandro,

      JP has touched upon an important point - Explain why different business lines require different pricing procedures?

      Please explain a little more about the different business lines.

      Currenly, how many pricing procedures are in use? And how is the pricing procedure determination being done?

      Thanks!

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    Former Member
    Oct 18, 2013 at 06:19 PM

    Thank you all for your comments.

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